Declining Companies Changing Quickly Can Also Death-Spiral

A recent story in the WSJ about Bed, Bath and Beyond highlights a few frustrating facts.

Picture this scenario: Number of shoppers in stores is declining. Too much fixed overhead. Employees fleeing. Too many SKUs. No private label strategy.

Everyone "knows" what to do next. It's obvious right? Or do they?

The big challenge -- it's always going to get worse, sometimes much worse before it has a chance of getting better.

Sometimes a new management team can apply lessons from their previous lives (Target in this case) and "shock the patient" so much that the remaining fans of the old chain just flee, wondering what happened to it.

The challenge is, the customers that appreciate the tactics being brought in are already gone. And so are you going to switch Target and Amazon customers from their currently loyalty even though they used to shop at BBB? Unclear.

What Bed, Bath and Beyond needs is not just transformation, it's a plan to get modern shoppers back into the stores. And for that it needs a reason to exist. Which is where the whole plan falls down.

You need a consumer value proposition that resonates.

In an era where the biggest of the big box retailers like Walmart, Target, and Costco are crushing it with consumer satisfaction overall, there is less space for a "medium box" retailer with a name that says "endless selection" literally in the name, but doesn't have endless selection anymore.

Will BBB make it? All signs point to no, still -- the most likely outcome is it sheds enough to become profitable, and then the chain is sold to new buyers.

Which in itself could be a win over the previous trajectory.